Curtis Yarvin, Power and Private Equity

Monarchy, Fascism or Private Equity: a putsch or a takeover?

In a conversation between Curtis Yarvin and Cenk Uygur (of The Young Turks), Yarvin proposes an “accountable Monarch” to rule over the US. A Monarch with absolute power, elected by the people every four years. Yarvin says we’ll need to get lucky for this to work. One roll of the dice and the wrong Monarch - who can do anything - could bring the whole thing down.

Now, it’s hard to parse exactly how much of what Yarvin says is for dramatic effect, how much is deliberately obscured, and how much is serious. (Is it obscurantism or is it the academic and civil service propensity to use ten words where one will do?)

He seems clever and earnest, but this is obviously a completely unserious proposal. Literal fascism is more thought through - some balance of marshal, religious and populist power with a dash of aesthetic principles (more on that later).

Obviously a system that needs a good dash of luck to work is a stupid system.

One can consider the centuries of tinkering to get to systems that kinda work today as efforts to obviate the need for luck: to prevent a big roll of the dice that goes KABOOM.

Of course there have been big rolls of dice that went KABOOM. Hitler was the greatest gambler of all. Demand the Chancellorship - all in, WIN. Militarise the Rhineland - all in, WIN. Invade France - all in, WIN. Invade the USSR - all in… KABOOM! Game over.

Stock and Flow of Power

Yarvin’s innovation and appeal - again as far as I can tell from having read him only occasionally and from this interview - is that he publicly dissects power abstracted away from labels like “democracy!” and “fascism!” that have devolved into grey, passionate synonyms of “good” and “bad”.

One reason this seems innovative is that no one speaks about the stock and flow of power publicly. This is a general problem: the most knowledgeable practitioners of anything are probably practicing, rather than writing about it. People who understand the anatomy of power - in Government, Corporatelandia, Academia - are probably wielding it and not writing about it. (How much should you trust what I’m writing?)

Yarvin acknowledges that centres of power are dynamic. They’ve changed over time around people and systems. FDR was a very powerful president - almost a Monarch. Trump and Biden are weak presidents. They can do, say, 10 - 100x less than FDR. Part of this is their failure to exert their will on the system. But mainly it’s due to an enlarged, complex, sclerotic system with power distributed and wielded in ways that have absolutely nothing to do with elections and the elected. FDR was able to wrap the power-fabric of the institutional universe around him - he was a supernova in a knowable universe. Trump and Biden are less able to: they have less force in a larger, more bloated, more opaque institutional universe today.

Thinking about power in explicit terms is not new of course. Everyone’s read Machiavelli’s The Prince. Everyone inside a Big Corporate is acutely aware of power centres all along the hierarchy - managing power centres above and exerting power below. Investors are acutely aware of investee company power vis-à-vis competitors, customers and suppliers. Venture Capital and Private Equity investors are very explicit in thinking through power flows in governance: the relative power of founders vs investors, other board members and employees. Matching accountability and responsibility in organisational structures. This manifests in formal structures: voting rights, ownership stakes, shareholder and employee terms. But much is informal: the halo around a founder or gravitas of a particular investor. Each board dynamic and founder relationship is different and power flows and resides in different ways.¹

This is not nefarious. This is the daily bread and butter of investing. Private Equity investors are control investors and effect their investment theses through company executives. The nature of effecting change through people is to understand how to influence, how to wield power. This is not (usually) shouting at people, or beheadings and floggings. This is what is called Leadership. It’s hard and unevenly distributed. Why was Napoleon so beloved by his men and so effective in leading them in the field? Or Elon Musk and Steve Jobs?

Even Hitler had to effect change through people. A totalitarian structure must dilute other power bases. Hitler did this in many ways. Out of the barrel of a gun, such as in the Night of the Long Knives, where he literally killed a rival power base (and other loose ends) in a maneuver that granted him army loyalty. Organisationally: Nazi party structures were cartoonishly complex, with overlapping responsibilities, ensuring never-ending internecine conflict among lieutenants, ultimately diluting power and minimising the possibility of rival power bases. Hitler also gained power through credibility e.g. vis-à-vis his Generals in the astonishing victory over France. Their prudent cautions were thereby diminished ahead of the disastrous attack against the Soviet Union.

Private Equity executives do not have the luxury of slaughtering their opponents. Nor can they line up failed executives against a wall as a warning to CEOs everywhere.

When I hear Yarvin talk about CEOs as Monarchs I think - I guess? If it’s those Monarchs who are constrained by councils or who must manage rival power bases (clerics, nobles, merchants)? Rarely do you get a CEO who is really an absolute Monarch in the Yarvinian fantasy.

In fact, one might characterise the US President today as a CEO of a particular kind of company: a bloated, rich, old, dusty, listed corporation with a shareholder base of mom and pop shareholders and maybe a few shadowy nominee companies. Its cantankerous board members are aging on sinecures. Shareholder power is too diffuse to hold management or the board to account. Executives are paying themselves a motza. The place is ridden with fiefdoms and incomprehensible internecine bickering and power bases.

Private Equity takeover, anyone?

What Yarvin is really yearning for is a Private Equity takeover.

Replace diffuse ownership with concentrated ownership (often it will literally come down to a single decision maker). Replace the CEO at will. Sack three layers of management and bottom quartile performers. Shut down cash incinerating pet projects. Invest in growth. Strategic acquisitions (Greenland?).

This is the model Yarvin yearns for but perhaps doesn’t have the vernacular to express, being the child of the civil service and courted by West Coast technologists rather than East Coast high financiers.

There is, of course, a big difference between a Monarch in Yarvin’s conception and Private Equity.

The Private Equity boss is not selected randomly. There is no roll of the dice and a prayer for luck: there is a filter through an ecosystem of capital. Nor is there a need to pander to a voting class: no pork barreling employees or promising them the pleasure of watching their managers hang.

This is how it works: usually a few founders with the right capability, experience, network and charisma Will an ecosystem of capital to anoint them as Custodians. And they anoint underlings to find overlooked stars and turn them into Prom Queens.

This process is not random. It’s certainly not democratic. There are processes, filters.²

Nor are these firms unaccountable. To their investors, to the power structures that regulate investment committees, founders, employees, and so on. But Private Equity is, overall, a mechanism that spreads concentrated decision making and management expertise.

This is something of the model used to build the Apollo program, the Manhattan Project and Singapore. None of these were democratic but none of them were Monarchies. Concentrated decision making by capable individuals devolving power to teams for a purpose.

I guess all I’m really describing is (at its best) a functioning meritocracy? There’s not much aristocratic about the Private Equity class - there might be a bit if you believe wealth persists across generations and assortative mating can result in a class of ubermensch wink wink. But a ruthless meritocracy is probably better than a geriatric oligopoly, with Business Interests sucking out rents over pursuing profits in ways that at least improve institutions.

Care for a putsch?

I don’t think this is what Yarvin is really solving for. Private Equity with its capable concentrated decision making solves for sprawling government rot, but I think he wants something more. I think he wants a Monarchy with all the trapping of ceremony - some godlike or god-representative figure decked out in regalia for whom he can weep into his morning cereal. Maybe the Monarch is a rallying point for the nation: someone who can be vested with cultural, historic, divine authority.

The challenges are at least 2-fold: how is this person selected? One does not simply grant absolute power: it must be taken. Granted power is invariably checked power. Taken power is usually…. ugly. Although there are relatively recent not-so-ugly exceptions (e.g. France in 1961 is a nice example that resulted in persistent centralised presidential power. Chile is an uglier example. And there have been many instances of functional coups in the other direction - transitioning poorly functioning autocracies into democracies like in Greece in 1974, or the Eastern Bloc with the end of the Soviet Union).

But maybe a putsch is indeed what Yarvin has in mind, and clean or ugly is beside the point. Maybe a Monarch need not be a retvrn to a literal King - perhaps a Leader is sufficient. Dictators of all stripes, not just literal Monarchs, vest themselves with cultural, historic, divine authority. They become the vehicle for the realisation of a nation’s destiny. Maybe a (light?) fascist takeover is what Yarvin is obliquely alluding to. He is after all talking to a progressive audience at The Young Turks. Maybe he can’t use the f-word without losing his audience, and Monarchy is his Trojan Horse?

I may be misreading or misrepresenting Yarvin. The upside of “obscurantism” is you become a Rorschach test. You can be everything to everyone - everyone thinks you’re secretly winking at them. The downside is who knows what he’s really saying. But at some point the cloud of ideas must condense into rain and fall.

Anyway, it’s a fun interview.

1. I previously shared the views of my former boss and mentor on power within a Private Equity firm.

2. Politicians are selected through a filtered process too: we select for pull-string dolls with stock phrases who suffer inordinate boredom and a lack of curiosity.